Exercise 08-11 Direct materials and direct labor variances LO P3 Hutto Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures. Direct materials (15 lbs. @ $3 per lb.) Direct labor (3 hrs. @ $15 per hr.) $45 45 During May the company incurred the following actual costs to produce 8,600 units. Direct materials (132,000 lbs. @ $2.80 per lb.) Direct labor (30, 600 hrs. @ $15.10 per hr.). $369,600 462,060 AH = Actual Hours SH = Standard Hours AR = Actual Rate SR = Standard Rate AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price (1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) (2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting (2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Round "Rate per hour" answers to 2 decimal places.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the direct materials price and quantity variances. Indicate whether each variance is favorable or unfavorable. Actual Cost Standard Cost